And the issues don’t stop at start-up. Once you’ve managed to get your business off the ground, finding the cash to expand the business by investing in people, marketing and sales efforts can be cost prohibitive and lead to a Catch-22 situation.
So if you are struggling to get investment from the banks, you’re toying with the idea of selling part of your company or you are just scratching your head and thinking where to start. Start here: with the free stuff.
During times of austerity, businesses cut back to the basics and tried to save money wherever possible. We have had our fair share of this, and who in the SME world hasn’t? We used a few free tricks to keep the ship running, and which have carried us into the happier and more lucrative times. Here are a few of them, and some additional tips from other businesses we met along the way.
Technology is a bind for many businesses, although there are small business licenses out there, they are still expensive and in some cases a false economy.
Use free Google Documents, Google Drive and Google Mail.
Google Drive enables you to save 15GB for free (all in the Cloud and accessible securely from any location).
Google Documents offers options such as Spreadsheet, Document, Project, Draw and Presentation. You’ll have slightly limited functionality compared to some of the paid systems out there (such as fonts and page layouts), but you’ll have added functionality such as the ability to collaborate on documents, having several colleagues able to access and create within the same document at the same time.
When you have a little bit more cash, you can upgrade to Google Apps, which is essentially the same suite of tools but with better cross-business integration, delegation and calendar functionality.
If Google documents don’t offer you the functionality that you require, then look to Open Office which offers a wealth of top notch tools including draw and presentations functionality. You can even ask design agencies to design your adverts and other creatives in this format so that you can make changes yourself and save on design fees.
Use cut down versions or free trials
Many tools offer cut down versions of their tools as free entry level access. Products such as presentation tool, Prezi, offer a free version allowing a limited number of presentations to be created. If you decide that the tool is helpful and adds value to your business, then you can choose to upgrade, justifying the cost.
Use free trials
Many software is now offered on a free trial basis, even offering the highest level of product for that limited time. Of course the software companies are encouraging you to use their products, but it gives you a chance to test it out and get a genuine feel for the usefulness and, in the case of products such as Search Engine Optimisation tools for websites, you can actually glean a lot of valuable and useful information that can be used after the free trial is over.
Payment on results
Although not free, there are a number of companies now offering guarantees on their work or payment options only when the work is completed to the satisfaction of the client. This gives a piece of mind and can remove risk in a situation. For example, If you receive business from marketing activity and only need to pay when you have received a certain level of new business, then this cost can be easily found from the profits.
Already touched upon in the above section, there are many ways to market a business without a crippling marketing budget.
Switch advertising to PR
Although not completely free, as you might want to employ a good PR agency to work on releases for you. PR is nearly always a cost effective alternative to advertising and one that is seen as more trustworthy by the reader. Release interesting case studies and product launches and respond to opportunities released by journalists, and you will receive genuine interest from people who care about your products or services or the area in which you are working.
Releasing good quality, helpful content about your business sector online through social media, blogs, forums and through your website will build your authority within search and generate more traffic to your website. Unlike Pay Per Click advertising, this can be done for free taking only time not money.
Give free content to influencers of your target customers
These influencers might be trade associations, publications and local government. Offer to give free presentations to members, write free guides for emailing or printing or offer to write a guest blog. This all offers good coverage for your business, projects you as a thought leader, and offers genuine useful information to your target sector.
Exchange skills or commodities
Networking with other small businesses can show up genuine opportunities for non-competitor companies to help each other for free. Even if your products or services are not applicable for other SMEs, this can be a helpful exercise.
Consider the following:
● If you have a large office or warehouse space, offer another business desk space in exchange for services that might be able to provide for you for free.
● Trade hours, commit to a number of hours of consultancy on a project in exchange for so many hours back. Where you work in a similar industry, but aren’t competitors this can work really well.
● Loan team members in quiet times in exchange for extra staff when you next need it.
● Link up with other companies to buy fuel or bulk buy equipment in order to save money.
● Agree to refer trusted companies to your clients, perhaps offering to include fliers in your invoices or sales packs, in exchange for the same back. Perhaps agree a referral fee, so that there is an added incentive for providing good quality leads and increase the size of your sales force with no overheads.
Not free, but a way of topping up the funds and gaining investment for particular projects. There are lots of options out there from:
● Entering small business awards such as the Smarta awards where the winners are awarded cash sums for use in particular projects
● Accessing specific sector based grants (particularly useful for charities)
● Lottery funding
● Regional funding (through local councils or Government focus areas)
● Incubator groups, looking to specifically grow small businesses
Just a few ideas as food for thought.
It is hard to start a company, and arguably more difficult to grow and expand, but external funding, loans and relinquishing ownership don’t have to be the only options. There are free and low cost options out there, it’s just knowing where to start and knowing where to the put the time and effort in. Small businesses need to share in their success, they need to let other businesses know how they make it work and in turn enable the SME sector to become the big businesses of the future.
Carl Benfield is Founder and Managing Director of Prescient Power (www.prescientpower.co.uk), a renewable energy company based in Leicestershire. Following a successful military career as a Major in the Army, Carl set about creating a truly ethical and sustainable company bringing real alternatives to our dependence on fossil fuels. Established in 2009, and now working with companies such as National Trust, RSPB, he and his team provide the means for businesses to take control of their energy and reduce their reliance on fossil fuels.